Q: Several months ago the dividend was cut substantially. The stock fell accordingly and has drifted lower in the meantime. Insiders have been adding shares. Should I join them or is this a trap
5i Research Answer:
The stock is very cheap at 5X cash flow; insiders own 10% and have indeed been buyers. But its small size, higher interest rates, commerical and retail exposure, and a possible recession all make this still a risky proposition. With an 11% yield investors are pricing in a possible second cut. We would not endorse this right now.